Very Quiet in Foreign Exchange

July 11, 2014

The dollar shows no net changes overnight against the euro, yen, Australian dollar, yuan or sterling. The greenback has ticked 0.1% higher versus the kiwi and Swiss franc and edged down 0.1% versus the loonie.

Stock trading in the Pacific Rim extended yesterday’s drop in North America and Europe, but there’s been a rebound today in Europe on lessening fear over the problems of Portugal’s second largest lender and the wider damage such might do. Share prices lost 1.4% in India, 1.3% in Indonesia, 0.7% in Taiwan and South Korea, 0.5% in New Zealand and 0.3% in Japan. Stocks recovered 1.6% so far in Italy and 1.2% in Spain. The Paris Cac is up 0.6%, and the British Ftse and German Dax have ticked 0.2% higher.

The ten-year German bund and British gilt yields are steady. The 10-year Japanese JGB slipped a basis point back to its recent low of 0.54%.

WTI oil and Comex gold fell by 0.4% and 0.1% to $102.57 per barrel and $1,338.50 per ounce.

Late yesterday came news of an unexpected 25-basis point cut of Peru’s central bank reference interest rate. This reduction followed a similar cut last November, and like then officials said the adjustment did not imply the likelihood of a a series of such moves. The new rate level is 3.75%, lowest since March 2011.

German consumer price and wholesale price data were reported.

Consumer prices in June rose 0.3% on month and 1.0% on year, confirming the preliminary estimate. Energy went up 0.5%, while all other consumer price items collectively rose 0.2% on month and 1.2% on year. Energy slid 0.3% on year.

The wholesale price index edged down 0.1% on month in June just as such had in May and recorded a 0.8% on-year decline. The 12-month rate of decrease was the smallest since July 2013.

Food prices in New Zealand jumped by 1.4% in June, but their 12-month rate of increase slowed to 1.2% from 1.8%.

Home loans in Australia stagnated in May.

Construction output in the U.K. unexpectedly sank 1.1% in May, their worst monthly performance since February, and that trimmed the on-year increase to 3.5% from 4.6% in April. According to the Conference Board, Britain’s index of leading economic indicators are climbed 0.5% in May even though the index of coincident economic indicators stagnated.

The French current account deficit widened 35% on month to EUR 3.1 billion in May. Turkey’s current account deficit narrowed 29% that same month to $3.43 billion. Greek import prices were 1.4% lower in May than a year earlier. Irish industrial production in May reversed April’s 2.5% advance. Spain’s CPI inflation rate was a mere 0.1% last month.

Canadian June labor statistics get released today. There are no significant U.S. reports.

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